Correlation Between Comstock Holding and Centessa Pharmaceuticals

Can any of the company-specific risk be diversified away by investing in both Comstock Holding and Centessa Pharmaceuticals at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Comstock Holding and Centessa Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Comstock Holding Companies and Centessa Pharmaceuticals PLC, you can compare the effects of market volatilities on Comstock Holding and Centessa Pharmaceuticals and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Comstock Holding with a short position of Centessa Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Comstock Holding and Centessa Pharmaceuticals.

Diversification Opportunities for Comstock Holding and Centessa Pharmaceuticals

-0.38

Correlation Coefficient

Comstock Holding  Centessa Pharmaceuticals

Very good diversification

The 3 months correlation between Comstock and Centessa is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Comstock Holding Companies and Centessa Pharmaceuticals PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centessa Pharmaceuticals and Comstock Holding is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Comstock Holding Companies are associated (or correlated) with Centessa Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centessa Pharmaceuticals has no effect on the direction of Comstock Holding i.e., Comstock Holding and Centessa Pharmaceuticals go up and down completely randomly.

Pair Corralation between Comstock Holding and Centessa Pharmaceuticals

Given the investment horizon of 90 days Comstock Holding is expected to generate 1.94 times less return on investment than Centessa Pharmaceuticals. But when comparing it to its historical volatility, Comstock Holding Companies is 1.18 times less risky than Centessa Pharmaceuticals. It trades about 0.06 of its potential returns per unit of risk. Centessa Pharmaceuticals PLC is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  328.00  in Centessa Pharmaceuticals PLC on September 14, 2024 and sell it today you would earn a total of  1,357  from holding Centessa Pharmaceuticals PLC or generate 413.72% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Comstock Holding Companies  vs.  Centessa Pharmaceuticals PLC

Comstock Holding Com

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Comstock Holding Companies are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong fundamental indicators, Comstock Holding is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Centessa Pharmaceuticals

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Centessa Pharmaceuticals PLC are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Centessa Pharmaceuticals is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Comstock Holding and Centessa Pharmaceuticals

The main advantage of trading using opposite Comstock Holding and Centessa Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Comstock Holding position performs unexpectedly, Centessa Pharmaceuticals can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Centessa Pharmaceuticals will offset losses from the drop in Centessa Pharmaceuticals' long position.

The idea behind Comstock Holding Companies and Centessa Pharmaceuticals PLC pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Content Syndication module to quickly integrate customizable finance content to your own investment portal.